Why Americans Are Foregoing Retirement

The traditional American retirement age of 65 is in the rear-view mirror. Nearly a third of Americans between the ages of 65 and 69 are still working and nearly 20% of those between the ages of 70 and 74 are working at least part-time.

Many continue working because they are healthier and are living longer than past generations. Others forego retirement because they enjoy working or because they just want to remain active.

Still others need the money. Longer lives bring with them higher healthcare costs which, even with Medicare and Medicaid insurance, make retirement more expensive. The decline of a traditional pension plan has made it more difficult to save enough to retire on and stagnant wages over the past decade or so has added to the need to work longer.

Ironically, healthy, well-educated people with in-demand skills who are least likely to need the additional income are more likely to keep working than are those who have more demanding jobs. It’s easier to sit at a keyboard and pound out computer code or news stories than it is to work in the construction trades or another more physically strenuous job.

Still, just because someone wants to work longer does not mean that’s possible. A recent report at Bloomberg News explains:

When surveyed, 61% of American retirees say they retired sooner than they’d planned. That’s more than anywhere else in the world, according to the 2017 Aegon Retirement Readiness Survey, of 16,000 people in 15 countries. Globally, 39% of retirees say they quit working early. Even part-time work may be unrealistic. [The Employment Benefit Research Institute] finds that just 29% of retirees say they worked for pay at some point in their retirement.

There are now more Americans working longer than at any time since the creation of Medicare. And that number looks set to rise even more in the years ahead. The pressure on younger workers to find jobs will intensify unless the U.S. economy comes up with a way to grow faster than the anemic rate of the past few years. The prospects for that are arguable.